Great Plains Energy, Inc. Q2 2009 Earnings Call

Executives

Michael Cline - VP Investor Relations and Treasurer

Mike Chesser - Chairman and CEO

Bill Downey - President and COO

Terry Bassham - EVP and CFO

John Marshall - EVPresident, Utility Operations

Analysts

Paul Ridzon - KeyBanc

Leon Dubov - Catapult

Michael Lapides - Goldman Sachs

Michael Goldenberg - Luminus Management

Tim Winter - Gabelli & Company

Rajeev Lalwani - Ecofin

Great Plains Energy, Inc. (GXP) Q2 2009 Earnings Call August 6, 2009 9:00 AM ET

Operator

At this time, I would like to welcome everyone to the Great Plains Energy, Second Quarter Conference Call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question-and-answer session. (Operator Instructions)

Thank you. I would now like to turn the call over to Michael Cline, Vice President of Investor Relations and Treasurer. You many now begin, sir.

Michael Cline

Thank you, Crystal, and good morning. Welcome to Great Plains Energy's second quarter 2009 earnings conference call.

Joining me on the call this morning are Mike Chesser, Chairman and CEO of Great Plains Energy and Kansas City Power & Light, who will provide a strategic overview; Bill Downey, President and COO of Great Plains Energy and Kansas City Power & Light, who will discuss KCP&L Operations and the update on the cost and anticipated in-service date for the new Iatan 2 coal plant; and Terry Bassham, Executive Vice President and CFO of Great Plains Energy, who will provide details on Great Plains Energy's second quarter 2009 financial results. Also joining us on the call today is John Marshall, Executive Vice President, Utility Operations, who will be available for questions.

Since some of our remarks will be forward-looking, I must remind you of the uncertainties inherent in such comments. The second slide included in this webcast and the disclosure in our SEC filings, contain a list of some of the factors that could cause future results to differ materially from our expectations.

Before I hand the call to Mike, I have three items to highlight for you. First, we filed our second quarter 10-Q after the market close yesterday. It is available along with supplemental financial information regarding the quarter in today's webcast slides on the main page of our website at www.greatplainsenergy.com.

Second I want to again remind everyone that we closed the Aquila acquisition on July 14, 2008. In October, 2008, we officially changed the Aquila name to KCP&L Greater Missouri Operations. For brevity, throughout this morning's presentation we will refer to the former Aquila as GMO.

And third, as a reminder, Great Plains Energy provides the financial information in its earnings releases in accordance with GAAP. In prior years, the company also provided core earnings, a non-GAAP measure that excluded the effects of discontinued operations, certain unusual items and mark-to-market gains and losses on energy contracts.

The company believes that in prior periods, core earnings provided a meaningful indicator of results that was comparable among periods, because it excluded the effects of these items. Given that the majority of the financial statement impacts of Strategic Energy ceased at the end of last year, beginning in the first quarter of 2009, the company no longer provides core earnings.

I would now like to introduce Mike Chesser, Chairman and CEO of Great Plains Energy and Kansas City Power & Light.

Mike Chesser

Thanks, Michael, and good morning, everyone. Thank you for joining us today. By now I am sure you have read yesterday afternoon's press releases announcing our solid second quarter earnings and the reaffirmation of our 2009 earnings guidance range of $1.10 to $1.40 per share.

We are pleased to achieve these positive results in an economy that remains challenging. Terry will provide the details on the numbers in his comments. We also announced yesterday that the cost reforecast we recently completed for Iatan 2 resulted in no change to the top end of the cost estimate range.

The service date is projected to be late summer 2010. as these results atest Bill Downey and our entire construction team at Iatan are doing a great job, keeping this project on track. Bill will provide more color around the re-forecast in his comments in a few minutes.

The quarterly results and the reforecast are the two most recent and a string of successes over the past few months. And that is why I would like to focus my comments this morning. We began this year with a lot on our plate, and some key questions, weighing on our investor minds.

These questions included; first would we deliver successful outcomes from our five pending rate cases, second would Iatan 2 continue to progress on budget and on schedule, third would our generation fleet perform well after challenges in the first six months of 2007-2008, fourth would we be able to successfully integrate KCP&L and GMO operations and continue to deliver the promised synergies.

And finally, would we be able to access the debt and equity market so to continue funding our capital programs and strengthen our credit position. I am pleased to report that the answer to each of these questions is a strong yes. Our achievements over the past few months have built upon the solid track record of execution we have shown consistently as we move through the comprehensive energy plan. They also have position us well to complete the plan with a final piece Iatan 2 set to come online at roughly this time next year.

In the next few minutes, I would like to talk a bit more about each of these successes. On our May fall, we announced that we had reached settlements with parties to all four of the rate cases we had filed in Missouri last September. In June, we announced the settlement KCP&L's Kansas case.

Commissions in both states have approved the agreements, which provide a total rate increase of about $218 million or roughly 85% of what we requested last fall. The new Kansas rates became effective August 1, and the New Missouri rates became effective September 1.

A key piece of these successful rate cases was getting the Air Quality Control System at Iatan 1 into rate base. And then in a manner that limits our [prudent] exposure on this project in our 2010 rate case. The project met its in-service criteria in mid-April.

Early in 2009, we made a key change in our Senior Executive team by naming Scott Heidtbrink as our Senior Vice President of Supply. Scott and his entire organization are driving a number of initiatives to improve the operation of our coal fleet. And we have seen the benefits of these efforts reflected in an improved performance measures year-to-date, excluding Iatan 1, which had an extended outage to tie into AQC system. In addition, Wolf Creek has exhibited excellent performance since its last refueling outage in the spring of 2008.

The GMO transaction continues to be a great addition to our utility footprint. As noted in the press release, GMO has contributed about $25 million in earnings for the first six months of 2009, including $7 million from utility operations. We are pleased with these results, especially given the challenges in the economy. Importantly, the expected synergy benefits of integrating the operations exceeded our initial projections.

I am especially pleased that during the integration process, which as you all know can be a disruptive time, our employees have kept their focus squarely on the customer. As a result, our residential customer satisfaction levels rank Tier 1 in a recent J.D. Power survey. Bill will discuss these significant achievements in more detail in his section.

We started the year with some significant financial challenges, a tough and uncertain economy, extremely difficult capital markets, high cash requirements as we head down the stretch to complete the CEP, and pressure on our stock pricing credit metrics. And I am happy to say that we have met these challenges. We cut or [deferred] $450 million in capital expenditures from 2009 and 2010, and implemented a focused cost control effort across the organization from which we are seeing strong benefits year-to-date.

And we made the right decision albeit a tough one to reduce the dividend. And finally, we have ceased upon opportunities in the capital markets. In March, KCP&L issued $400 million in long-term debt to improve its liquidity, and in May Great Plains Energy successfully accessed the equity and convertible markets in a dual-tranche offering, raising nearly $450 million. Through these steps, as well as our improved plant performance and favorable rate case outcomes I described earlier, we believe we have significantly improved our financial and credit risk profile and eliminated or reduced a number of the key risk factors impacting our company.

So to say the least, it has been a busy and productive first half of the year. As I just described and as this chart depicts, we have built and are growing a strong utility platform. At the same time, we are focused on excellence in execution; we are also actively engaged in the forces that are shaping the future of our industry. Of course, a big story at the national level is screening out gas legislation, which is one of the Obama administrations key priorities.

In late June, they successfully lobbied the House of Representatives to pass the American Clean Energy and Security Act 2009, also known as a Waxman-Markey Bill. It is now been taken up by the Senate. KCP&L supports the long-term goal Waxman-Markey, which is to reduce carbon emissions 83% from 2005 levels by 2050.

Through carbon cap-and-trade, KCP&L believes it is possible to transition to a more sustainable energy future. As our transition occurs, we have a set of principles to define how we view the carbon cap-and-trade policy, as well as dictate improves we would like to see in the final legislative product.

And we plan to work in collaborative spirit to first prevent near-term and dramatic rate increases for our customers. Second, coordinate carbon dioxide reduction goals with the availability and cost of technology to help control carbon emissions and the ability to build necessary infrastructure.

And third, maintain our competitive electric rates, in order to faster continued regional economic development. There are a number of elements of the Waxman-Markey that are inconsistent with these objectives and we are going to be working closely with EEI and other leaders in the industry to shape policy in a way that preserves the long-term goals, while keeping financial and operational implications manageable for utilities and their customers.

On the state level, we were instrumental in the development of a very important energy efficiency bill that was recently sign in the law by Missouri Governor Jay Nixon. The stated goal of the Missouri Energy Efficiency Investment Act is as follows.

To value demand side investments equal to traditional investments and supply and delivery infrastructure, and to allow recovery of all reasonable and prudent cost, and delivering cost effective demand management programs.

We believe that leveling the playing field with new generation of energy efficiency as compared to new generation; will drive the needed additional focus on energy efficiency, which will benefit both customers and shareholders. And Bill will cover this in more detail in his section as well.

At this point I would like to hand the discussion to him.

Bill Downey

Thank you Mike, and good morning everyone. Mike touched on a number of successes in our regulated utility operations this quarter. I will elaborate on those in a few minutes, as well as update you on a few other key areas of interest. As this list of highlights conveys, we have had a very productive quarter in first half in 2009. I know that first and foremost in your minds is our Iatan 2 cost and scheduled reforecast process. With that in mind, I will begin with that and then circle back to the other key highlights.

As a reminder, our last three forecasts was completed and communicated on the first quarter earnings call in May 2008, when the project was 70 to 75% engineered. We indicated at that time that when Iatan 2s engineering and design were essentially complete, we would conduct another review of our cost and schedule. We kicked off that effort in March of this year using a process that looked very much like 2008, applying the same rigor and discipline to the review, as we did in the prior assessment.

Now as then, several important parties were involved, including our key contractors and also, many members of our internal project team and a number of outside experts. The results of our efforts are shown on this slide. We estimate the total final cost of the Iatan 2 coal plant to be in the range of 1.59 billion to 1.65 billion. In keeping with the disclosure format we adopted in our 2008 10-K, this figure excludes allowance for funds used during construction and common plan previously included in the project cost estimate we provided for Iatan 2 in May 2008.

The combined KCPL GMO share is projected to be in the range of 1.15 billion to 1.20 billion. I am pleased to report that the top of this range is unchanged from the disclosure in the companies 2008 10-K. The bottom of the range rose 2.5% or $28 million. As such, we have narrowed our range from 15 months ago, and which would be expected with now only a year or so remaining until the unit is projected to be placed in service.

The all in project cost range including common plant, translates to an estimated cost per kilowatt of between roughly 2100 and $2200. We continue to believe that Iatan 2s cost will be competitive with other newly constructed coal fire units coming online during the same timeframe. The plant is scheduled to be placed in service in late summer 2010.

Based on this timing, we expect that we will be filing our next rate cases in early 2010 and have new rates in effect in late 2010 or early 2011. As we reported on our first quarter call in April, we successfully completed in-service testing for the Iatan 1 Air Quality Control System. Another and major environmental project, the new Selective Catalytic Reduction system at Sibley 3 that is in service criteria during the first quarter. The addition of these projects to rate base was a significant component of the rate cases we filed last September in Missouri and Kansas.

In the second quarter, we successfully settled all five cases, and all have been approved by the respective Commissions, as the chart shown here indicates we were granted 85% of our original ask overall, which we viewed as very constructive outcome.

New rates became effective for KCP&L and Kansas on August 1, and new rates will become effective in Missouri on September 1 for our electric utilities. I also want to mention another noteworthy item in both Missouri and Kansas Commission orders. An effective Cap has been set on the potential amount of Iatan 1 and common facility cost that would be subject to this allowance in our next round of cases.

In Missouri, the Cap is $30 million for KCP&L and $15 million for GMO. The maximum exposure represents roughly 11% of each entities projected share of the Missouri jurisdictional costs. In Kansas the Cap on this allowance is $7.5 million, unless the final cost of Iatan 1 and common were to exceed our disclosed budget, in which case the Kansas jurisdictional portion of the excess would not be subject to the Cap. However, since we are confident that the final cost will be below our estimates, we view the effective Kansas cap as being $7.5 million. This represents slightly over 3% of KCP&L's estimated share of the Kansas jurisdictional costs.

I will turn next to plant performance. As expected, KCP&L's coal fleet equivalent availability and capacity factors for the second quarter and year to-date were lower than the same periods in 2008, due to the outage at Iatan 1 to overhaul the unit tie in the Air Quality Control System. That outage started last October and lasted until April of this year.

However, excluding Iatan 1, KCP&L's coal plant equivalent availability factor and capacity factor in the second quarter of 2009, were 79% and 72% respectively. This was an improvement over second quarter 2008, equivalent availability of 76% and capacity factor of 71% again, excluding Iatan. For the first six months of the year, equivalent availability including Iatan was 77%, which was higher than the adjusted year-to-date figures in each of the two preceding years.

As Mike mentioned earlier, we are pleased that performance improvement initiatives under way in our supply organizations are contributing to improve results. One example of the successful initiative is at our Iatan unit where our team has worked to optimize the balance between output and the forced outage rate. The results have been very encouraging. Iatan equivalent availability factor in the second quarter was 13 points higher than the second quarter of last year and 8 points higher than the 2007 quarter. We will be looking to implement this initiative at other units in the fleet in the months ahead.

At our Wolf Creek nuclear unit, we had a short outage in the second quarter that lowered both equivalent availability and capacity factors to 97% after 100% performance for both in the first quarter. However, the second quarter 2009 metrics were much improved over last year's quarter, when both equivalent availability and capacity were at 50%, as a result of longer than anticipated refueling outage.

We believe that the knowledge we gain from the outage will serve us well in planning and completing the next scheduled refueling outage this fall. We included this next chart in our last earnings call. It is a graphic that we use internally with our board to track our progress in achieving synergy targets from the continued integration of KCP&L and GMO.

Various operating groups across cost the company are working to document in detail or charter the synergies they are targeting over the next five years. As they do this, we are refining our estimates and finding additional opportunities for saving. I am pleased to report that in the second quarter, we identified another $25 million of net synergies we expect to capture.

Our total five year projection is now just under $700 million, which exceeds our original target by approximately $50 million. As a reminder, the synergies are based upon projected and actual costs compared to 2006 costs adjusted for known and measurable changes.

This is a very positive story, as we work to identify and capture the benefits of the GMO acquisition and reflects our integration efforts across the organization. We will keep you posted periodically on our progress.

The next chart depicts another success story with regard to our integration efforts. At the time of the acquisition among a group of 120 utilities KCP&L's J.D. Powers customer satisfaction rankings were Tier 1, while GMOs were at the opposite end of the spectrum at Tier 4.

This chart reflects the most recent J.D. Powers customer satisfaction rankings for the midwest large utility group. As you can see, our utilities which operate under the KCP&L trade name, earned a spot near the top of Tier 1. They have supplemented the J.D. Power results with our own customer surveys and have received very high marks for reliability and customer satisfaction in those as well.

This is an outstanding accomplishment in the face of a number of challenges, including a difficult starting point for GMO as I mentioned, three rate increases since 2007 for KCP&L customers, a very active spring in early summer storm season, and as Mike allotted to the uncertainty that has the potential to impact both employees and customers during an acquisition and the subsequent integration process.

Despite these headwinds, our company has stayed intensely focused on serving the needs of our customers, and it is gratifying to see their positive response. My thanks and congratulations to our employees for this achievement.

I will close with a few comments regarding developments on the state legislative front. As Mike mentioned in Missouri, Governor Jay Nixon signed Senate Bill 376 the Missouri Energy Efficiency Investment Act into law in July in our service area.

The Act updates Missouri's energy regulations to allow recovery of and return on energy efficiency investments. This will put them on equal footing with investments in new generation.

As most of you know, we have been a strong advocate for energy efficiency both nationally and in our region. With Senate Bill 376, similar to our comprehensive energy plan, we were able to mobilize and work in collaboration with a broad spectrum of special interest group, citizens and businesses to rally support for the bill.

For this passage, our customers and shareholders are now positioned to proactively participate in an energy trend that we believe will reshape our industry in the coming years. Also in Missouri, I wanted to mention a new Commissioner Robert Kenney was appointed last week by Governor Nixon to replace Connie Murray whose term expired in April.

Mr. Kenny is an attorney from St. Louis. He served under then Attorney General Jay Nixon as an Assistant Attorney General, specializing in consumer protection cases. Most recently, he served as Chief of Staff for current Missouri Attorney General Chris Koster.

As some of you may recall, Governor Nixon had perviously named Joe Bindbeutel, to fill Murray's seat. However, the appointment occurred after the legislative session had ended, and he was therefore not confirmed by the Missouri Senate. Governor Nixon later withdrew Bindbeutel's appointment and named him to a position on a different State Commission.

Moving to Kansas, the key development there is an omnibus energy bill recently signed by Governor Parkinson. A major component of the bill is a mandatory renewable portfolio standard, which target - with targets of 10% by 2011, 15% by 2016 and 20% by 2020. Similar to proposition see in Missouri, the Kansas bill would limit the associated rate impact to 1%.

That warps up my prepared remarks. Next up is Terry for a discussion of the financials.

Terry Bassham

Thanks Bill and good morning everyone. My comment this morning are focused on the result for the quarter and year-to-date, reaffirmation of our 2009 guidance range, liquidity and credit ratings.

I will start with the result for the quarter. As we noted last quarter, beginning in 2009, we are no longer providing core earnings. As a result, my remarks this morning will focus on GAAP earnings. Also keep in mind that we acquired GMO in July last year, so there was no GMO impact in our financials in the second quarter of 2008.

I will start first with an overview, and then I will provide some additional color on the quarter and year-to-date period of our segment on the next several slides. Great Plain Energy's earnings for the first quarter were 33.3 million or $0.26 per share. This compares to a loss of 5.4 million or $0.06 per share in the 2008 comparable period. A big contributor to the increase in earnings this quarter compared to last year was our electric utility segment, where earnings increased 34.9 million or about $0.24 per share.

The key drivers were earnings at GMO as utility operations, higher pretax earnings at KCP&L and lower income taxes at KCP&L. The increase in electric utility earnings was partially offset by decline in results in our other segment of slightly over 11 million. In addition to additional interest expense related to the equity units issued in May, the comparison to last year is less favorable, because 2008 results reflects a number of positive items that were excluded from core earnings.

Additionally, though we did recognize a small loss in the second quarter of 2009 related to a tax accrual for the discontinued operations of Strategic Energy that amount was about 15 million lower than the loss on those discontinued operations last year. This contributed to the 2009 earnings pickup as well.

Finally, the number of average shares outstanding increased significantly as a result of the shares issued for the GMO acquisition, as well as new common shares issue in 2009. This resulted in this dilution of $0.13 for the quarter.

For the year-to-date period, Great Plains Energy's earnings were 54.6 million, or $0.44 per share, as compared to earnings of 41.7 million, or $0.49 per share in the 2008 comparable period.

Electric utilities earnings increased to 25.3 million compared to the same period in 2008. Drivers of this increase were GMO's utility earnings, higher allowance for funds used during construction or AFUDC at KCP&L and lower income taxes at KCP&L.

Other segment activities recognized earnings of 7.5 million compared to a loss of 17.9 million for the same period in 2008. The main factor behind the roughly 25 million improvement in 2009, is a positive contribution from GMO's non-utility operations including a large tax benefit from an audit settlement. 2008 results also reflect a number of unfavorable items. For 2009 year-to-date, the higher average number of common shares diluted earnings per share about $0.20.

Now, I will turn to the details by segment. Earnings in the electric utility segment increased 34.9 million in the second quarter compared to the same period in 2008.

GMO contributed 7.9 million or $0.06 per share. Retail revenues increased about 150 million compared to the same period in 2008. The addition of GMO's revenues accounted for nearly all of the increase. KCP&L's retail revenues were basically flat to last year's quarter, at 278 million.

We estimate that weather favorably impacted KCP&L's revenues by around 4 million over last years quarter, but this was offset by drop in weather normalized, megawatt hour sales.

I have another chart that I will show you in a minute that will shed a little more light on the sales by customer segment. On the wholesale side, KCP&L's wholesale revenues decreased 11.5 million from last year's quarter.

The big driver was a 41% decrease in the average market price per megawatt hour sold, which in turn was primarily due to lower natural gas prices.

Partially offsetting the pricing impact was a 23% increase in megawatt hour sold. We saw a 9% in KCP&L megawatt hours generated as a result of improved overall plant availability, and we also had more megawatt hours available for sale due to slightly reduced retail demand.

Purchase power expense to KCP&L decreased roughly 24 million compared to the same period in 2008. Our lower natural gas prices hurt us on a wholesale revenue side. They helped us in terms of purchase power, as our average cost per megawatt hour fell 59% from last years quarter.

Purchase power volume was also down 23% compared to last year when we have lower overall plan availability as result of the Wolf Creek refueling outage.

KCP&L's non-fuel O&M expenses decreased about 8 million or 6%. Increased efficiency in our operations has enabled us to shift some capital work from outside contractor to our employees as well our O&M improvement reflects spending reductions and the realization of synergies from the GMO acquisition.

Interest charges increased at KCP&L by just over 6 million, mainly caused by interest on new long-term debt issued in March 2009, partially offsetting this increase was a 3 million increase and a debt component of AFUDC resulting from the higher average construction work-in-progress.

KCP&L's income tax expense decrease 13 million compared to the same period in 2008. In the second quarter last year, we had roughly 20 million increases in KCP&L's deferred tax balances resulting from a change in the composite tax rate to reflect the sale of strategic energy. We also had higher pre-tax income this year, so the higher taxes associated with that offset partly year-over-year favorablity.

For the first six months of 2009, earnings for the electric utility segment 50.2 million or $0.41 per share, including earnings from GMO of 6.9 million or 6 per share. In addition to the lower income taxes that I just talked about, the other key contributor on the plus side for KCP&L year-over-date was the equity component of AFUDC which increased about 7.1 million compared to last year. As construction continued at Iatan 2 through the balance of 2009 and next year, this will continue to grow.

From a revenue perspective, lower wholesale at KCP&L has been the story for the first six months, as it was for the second quarter. Year-to-date, KCP&L's wholesale revenues were down about 27 million compared to 2008. KCP&L's retail revenues declined about 2.5 million year-to-date.

The impact of weather through June has been minimal, so the decline is attributable to lower demand, which I will talk about in a minute. These declines in revenues at KCP&L have essentially been offset by lower purchase power expense for the reasons I just discussed.

Given the challenging economy, we often get questions about how our three key customer segments; residential, commercial and industrial are performing from a retail demand perspective.

So I wanted to share some additional detail. For the second quarter 2009, residential commercial and industrial accounted for 35%, 50% and 15% respectively, total retail megawatt hour sales. This chart is a combined view of both KCP&L and GMO customer demand, as measured by weather normalized, megawatt hours sales period-on-period.

The overall change in megawatt hour sales captures changes in both customer account and customer usage. As you can see, like other utilities across the country we are seeing a significant decline in industrial demand. The second quarter and year-to-date sales down 11.5% and 9.6% respectively from the prior year's periods.

These declines are attributable to declines in both the number of customers and more significantly a major drop in usage per customer. At this point, the fall off in usage appears to be due more to general scaling back of activity, rather than permanent declines due to facility closings and like.

The demand trend in industrial segment is negative, the impact on revenues is mitigated to a degree by two factors. First, industrial rates were designed with lower pricing and higher volumes, so when sales are lower they are made at higher prices. And second, as I mentioned earlier industrial is a relatively small part of our total mix.

In the commercial sector, we have seen both customer growth and an uptick in usage per customer in both second quarter and first half of the year. As I mentioned this is our largest segment in the favorable activity here has helped to offset declines in industrial and residential.

Full year weather normalized megawatt hour retail sales are trending lower than the level projected in our 2009 earnings guidance. However, we are not adjusting our full year view at this point, and will continue to closely monitor demand trends in the third quarter as well as the economic forecast for the country and our region.

In our other segment, which mainly includes unallocated corporate charges in GMO's non-utility operations, we reported a loss of 6.4 million or $0.05 per share for the quarter compared to an earnings of 4.9 million or $0.06 per share for the same period in 2008.

The low results are due to the 3.5 million of additional interest expense for the equity units we issued in May. Additionally the 2008 period included an 8 million positive mark-to-market earnings impact from an interest rate hedge.

For the other segment year-to-date, earnings were 7.5 million or $0.06 per share compared to a loss of 17.9 million or $0.20 per share for the same period in 2008.

The main factor deriving the improvement in 2009, was an earnings contribution of about 18 million from GMO's non-utility operations, of which 16 million was a tax benefit in the first quarter due to the settlement of 2003-2004 tax audit.

The favorable GMO impact was partially offset by the additional interest expense for equity units I mentioned previously.

Additionally, 2008 year-to-date included a net loss of about 7 million related to an interest rate hedging loss and merger related cost offset by income from a litigation settlement.

I will turn next to a couple of slides on our liquidity, credit ratings and capital structure. As this chart reflects, our liquidity at the end of the quarter was very strong. It was nearly 1.2 billion of available capacity on a consolidated basis. Our liquidity benefited from our successful common stock and equity units offering in May. We raised over 430 million net proceeds and used the full amount to repay short-term debt. Of the 1.5 billion of consolidated credit line capacity shown in this chart, over 90% matures in 2011. So we will not have near-term facility renewals to continue.

As you know, maintaining our credit rating is important, and it was one key driver behind the equity issuance we did do are safe in the first quarter and a 450 million dual-tranche offering in May. We maintained an active dialog with the rating agencies, and have kept them closely apprise of our operational, regulatory and financing activities over the past several months. We believe our accomplishments are evidence of the importance of our credit rating.

We will certainly continue to keep them posted on our progress. From financing plan standpoint, we have enough plan to be in the capital markets for the remainder of 2009. We will be evaluating our long term debt requirements for 2010, 2011 and beyond as part of our annual budgeting and planning process that is getting underway. You will note on the graph at the lower left portion of this chart that we have very small long-term debt refinanced requirements this year and next.

Finally, I wanted to make a couple of comments about our 2009 earnings guidance. As we indicated in our press release, we are reaffirming our 2009 range of $1.10 to $1.40 per share. In doing so, we have taken a number of first half 2009 developments into account, as well as our assessment of prospects for the balance of the year. We are looking at a couple of things in particular.

As I mentioned earlier, we are continuing to keep a very close eye on the retail demand. Secondly, our earnings guidance range assumes normal weather. If you've been following weather in Missouri and Kansas, you know that we have had an unseasonably cool July. In fact, it was the mildest July since 1973.

Heating Degree Days for the month, were 36% below normal, and 29% below July 2008. The first few days of August have been cooler than normal as well. Finally, we continue to look at opportunities to reduce O&M by harvesting synergies and improving productivity to implanting best practices across the organization.

As I mentioned earlier, O&M was positive for us year-to-date and it is an area we will continue to aggressively manage. That concludes my comments. Appreciate your attention.

With that I will hand the call back over to Mike

Mike Chesser

Thanks very much Terry. We always like to conclude with this chart because it captures the essence of our story. As we've noted before, by the end of 2010, and the completion of Iatan 2, the company will have invested approximately $2 billion in KCP&L's multiyear comprehensive energy plan, since it's inception in 2005.

We have a made and plan to continue to make the right infrastructure investments for our customers and our region. At the same time, execute them efficiently and prudently and grow our rate base significantly over the next several years.

In the process, we will be maintaining a sharp focus on the regulatory process, always critical, and also maintain effective planning, operational strength and a collaborative spirit with others in our industry to shape environmental legislation.

We believe that the net result of all of this will be affordable and reliable electric power for customers in our region for years to come and long-term value creation for our shareholders.

Thanks for your time and attention this morning. And at this point, we'll be happy to take any of your questions.

Question-and-Answer Session

Operator

(Operator Instructions). Your first question comes from the line of Paul Ridzon, with KeyBanc.

Paul Ridzon - KeyBanc

Given the visibility you have now, are you still pretty confident that there is going to be no need to come back for a second buy at the [equity apple]?

Mike Chesser

At this point, we see no need to do that.

Paul Ridzon - KeyBanc

What are the current plans for the [wind farm] you're you are obligated under the CEP?

Mike Chesser

While we're continuing to evaluate options there. We are working with a potential provider of a PPA, and if that comes through then we'll go with that route, if not we'll build it ourselves.

Paul Ridzon - KeyBanc

Would do the self build, would you envision a need for equity?

Mike Chesser

No.

Paul Ridzon - KeyBanc

Terry it sounds like you are maintaining guidance, but you are watching developments very carefully, is that a fair characterization?

Terry Bassham

Very fair, we are very pleased with the way we've been able to manage O&M and overcome delays in the rate case and other things and really lock our results here to-date, but we still produce 60% of our earning through the summer, and with the economy we're just being careful.

Operator

Your next question comes from the line of Leon Dubov with Catapult.

Leon Dubov - Catapult

Hey just on the guidance comments. You guys are kind of being little more cautious. I'm wondering if some of these drivers are kind of pushing you from sort of the high-end of the range to the lower end or you think maybe the whole range might be kind of that high.

Terry Bassham

Well, I think the whole range is possible.

Mike Chesser

That would be a way to answer that. I mean, there is a lot of different scenarios that could play out over the next six months. If we were to have significantly cold weather in August to September, if the economy were to decline further, we have a Wolf Creek outage coming up that we plan to have it go well, but that's always a risk.

So, I can see a scenario where we come out at the low end, but I can also see a scenario where we come out on the high end, if the weather becomes more normalized and our Wolf Creek goes well. So we really do have that kind of variability in the range at this point.

Leon Dubov - Catapult

So to hit the high end you don't actually need a specialty hot weather, you just need it to return to normal.

Mike Chesser

I have other things break our way.

Operator

Your next question comes from the line of Michael Lapides with Goldman Sachs.